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Assignment Submission Form

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Course Name: Competitive Strategy, Term 2, 2009-2010

Assignment Title: Competitive Strategy, Term 2, 2009-2010

Submitted by: Section B; Group B13

(Student name or group name)

The ISB Honour Code

• I will represent myself in a truthful manner

• I will not fabricate or plagiarize any information with regard to curriculum

• I will not seek, receive, or obtain an unfair advantage over other students

• I will personally uphold and abide, in theory and practice, the values, purpose, and rules of the ISB Honour Code • I will report all significant violations of the ISB Honour Code by members of the ISB community

• I will respect the rights and property of all in the ISB community

I certify that I have adhered to the Honour Code of the ISB in completing this assignment.

Signature Date: 19th July 2009

PTO

Indian School of Business
Assignment Submission Form

Page 2

Group Submission

Group Name: Section B; Group B13

Group Member 1: Hardik Vijay Jhaveri Student ID: 61010438

Group Member 2: Jay Shah Student ID: 61010117

Group Member 3: Prashant Ram Student ID: 61010216

Group Member 4: Priyom Sarkar Student ID: 61010134

Group Member 5: Suyog Kalyanji Kotecha Student ID: 61010319

To be filled by Evaluator Only:

Score Obtained: __________________________________________________

|Reliance Communications Ltd |
|Competitive Strategies in |
|the Indian Telecom Sector |
|Group B13 |
| |
|19th July 2009 |
| |
| |

Contents
Executive Summary 1
Area of focus 1
Observations 1
Conclusion 1
Dhirubhai’s Dream 2
Indian Telecom Industry 2
Highlights 3
Porter’s Five Forces Analysis 3
RCL’s Initial Launching strategy 5
Scope of Competition (where): Selective 5
Mode of Competition (How): New game 6
Timing of competition (When): Timing 7
Competitive Reactions 8
Tariff war 8
Industry Evolution and subsequent strategic moves 8
Reliance Communications 9
Attractiveness test: 9
Cost of entry test: 10
Better off test: 10
Mahanagar Telephone Nigam Limited (MTNL) 11
Hutchison Essar - Vodafone 11
Bharti Airtel 12
Implications 14
Exhibits 16
References 29

Executive Summary

Area of focus

India is the fastest growing telecom market in the world[i]. Reliance Communications’ (referred to as RCL henceforth) entry in 2002 marks a watershed moment in the history of Indian Telecom sector. This paper looks at how RCL broke through the stronghold of established players in an industry that intrinsically provides a huge first mover advantage to previous incumbents. The competitive interplays and strategic moves by various selected players (such as Tata Teleservices, MTNL, Bharti Airtel and Hutch) are also analyzed with a special eye towards how Bharti sustained its competitive advantage despite relentless pressure from RCL on all fronts.

Observations

We observed several strategies employed by the Indian telecom players such as diversification, globalization, market entry, sustaining competitive advantage, etc.

The players such as Reliance Communications and Bharti have met with tremendous success whereas the verdict is mixed for other players such as Tata Teleservices and MTNL.

Conclusion

RCL particularly has revolutionized the way we use mobile telephony, with their vision of making a phone call cheaper than a postcard. All the players analyzed in this report are still very much in the fray. Analysis of their past strategic moves may provide insights on future course of the industry and individual players’ profitability. Overall, the market is on the threshold for another round of explosive growth and Reliance Communications seems set to challenge Bharti for the throne of the Indian Telecom King.

Dhirubhai’s Dream

"Growth has no limit. I keep revising my vision. Only when you dream it, you can do it."
-Dhirubhai H. Ambani
Dhirubhai Ambani, the head of the largest business empire of India, had a dream to make telephone calls cheaper than a post card. His son, Mukesh Ambani eventually fulfilled Dhirubhai’s (who passed away on July 6, 2002) dream when Reliance Infocomm (which later became RCL) was launched amidst much fanfare on 28 Dec, 2002.

Indian Telecom Industry

Mobile telephony in India was born on May 13th, 1994[ii], when the government invited private players to submit bids to provide mobile telephony services. It was a widely cracked joke that one should not discuss his telecom strategy in a restaurant, or he may leak out his plans to at least 4 competitors[iii]. The government however, approved licenses for only 2 players to operate in each of the 4 circles open for bidding (metros-Bombay, Delhi, Calcutta and Madras). In the second round, the government opened up 18 more circles for bidding. These circles were divided into 3 categories, A, B and C with A having the highest revenue generating potential and C the least. The players were evaluated initially on their overall financials, telecom experience etc, and later on speed at which the network could be rolled out, rural coverage, license fee bid amount, etc.
Things brightened up after the National telecom policy in 1999[iv], when the government loosened its control on the sector. This is when there was a spike in competition, drop in rates and increase in penetration (exhibit 4). It was during this churn that RCL was launched.

Highlights

• 1997: Telecom Regulatory Authority of India (TRAI), the nation’s first independent telecom regulator was set up. • 1999: National telecom policy (NTP) [v]: introduction of a revenue sharing arrangement to replace the licensing arrangement. The main features of the NTP were revenue sharing model, launch of BSNL and MTNL as 3rd operators in all circles, increase in number of private operators, etc. • 2000: The corporatization of the DOT[vi] and the creation of a new state-owned telecom company, Bharat Sanchar Nigam Ltd (BSNL). The opening up of India’s internal long-distance market and the subsequent drop in long-distance rates as part of TRAI’s tariff rebalancing exercise • 2002: VSNL’s monopoly over international traffic was terminated and the company was privatized (Tata picked up 25% stake and management control)[vii] • 2003: Unified Licensing Regime[viii]: Allowed any telecom player to offer any service.

Porter’s Five Forces Analysis

Barriers to Entry:

1. Regulatory pressures: The government tightly regulated entry of players by allocating spectrum and licenses through bidding. For all calls made by a subscriber to another subscriber, the DOT did not allow sharing of networks. The operators had to use the DOT network and had to pay hefty sums for the same[ix]. The DOT also required submission of rental rates and tariffs while bidding. Highest license fees and lowest tariffs and rentals were preferred. 2. Huge capital requirements: Telecom requires huge infrastructure setup costs. This acted as a significant barrier to entry. Moreover, operators had to pay steep telecom license fees to the government. Capital investments were inversely proportional to the spectrum allocated. The higher the spectrum allocated the lower the company had to invest in equipment, and spectrum was allotted miserly, hence leading to a catch 22 situation.
Threat of Substitutes

The Pager was launched in 1995 in India, and was essentially a messaging device, providing the much needed mobility to the Indian middle class. The pager market peaked in 1998 when the subscriber base peaked to touch 2 million subscribers[x]. Pagers were a threat to mobile phones as they provided the same benefit – mobility, at a much reduced cost, but since the pager was a one sided messaging system, it did not prove to be a grave threat to mobile telephony.
Bargaining power of Customers

Consumers of mobile telephony held little bargaining power in front of operators. The average waiting period for a fixed land line phone was about 4 years in 1992[xi]. Consumers therefore saw mobile telephony as an improvement over other communication devices, with the added advantage of mobility. The competition was low back in late 90s so the customers did not have too many choices. Moreover as Indian telecom sector doesn’t yet have the option of number portability, the switching cost is high in terms of emotional attachment and the social pressure of having to inform the new number to all contacts. Overall customers had low bargaining power.
Bargaining power of Suppliers

The key suppliers for telecom players were (still are)
Handset manufacturers: in the nineties, when mobile services were predominantly GSM based, handset manufacturers (major ones were Ericson, Motorola and Nokia) did not really exert any pressure on operators. After CDMA was launched, the pressure was more on the handset manufacturers like LG, who depended on the CDMA operators for most of their revenues.
Telecom infrastructure players:[xii] These consisted of companies that owned telecom towers or network infrastructure such as Ericsson, Cisco, etc and fiber optic cable manufacturers. Traditionally, In India, many telecom operators backward integrated by invested in setting up towers for their telecom services. Hence there was not much pressure from that front.
Government for spectrum and connection: The government was perhaps the most important supplier to the telecom operators because they controlled spectrum allocation. The government auctioned spectrum in phases, to limited number of operators. In the 90’s, spectrum was allocated along with the license that was awarded to the first, second and third operators. Another important way in which the government exerted considerable pressure on the operators was through connection charges. Till the national telecom policy of 1999, operators had to pay a hefty fee to the government to connect to another network. This charge exerted a lot of pressure on the operators as it squeezed their margins and impacted profitability.
Rivalry

33 licenses were issued to 7 basic service providers as on March, 2003 (exhibit 15). Thus number of competitors was very low and players had high ARPUs (which declined gradually, check exhibit 12, 13 and 18). The market was growing and there was a large share of the pie for everyone. Thus rivalry was not very intense. Major competitors were Airtel, Spice, and Hutch.
Overall, Telecom was medium attractive industry due to the barriers to entry and low profitability of companies. (see exhibits 7a and 7b)

RCL’s Initial Launching strategy

RCL adopted a selective new game strategy. We will analyze their moves in 3 dimensions:

Scope of Competition (where): Selective

RCL chose to attack a niche area where the competition didn’t have any footprint: CDMA

Moreover, RCL primarily targeted B and C circles where volumes were achievable. RCL correctly foresaw that the growth is going to be in rural market (check exhibit 17). Since ARPUs would come down, it will be a volume game and RCL gained due to this strategy.

It would have been difficult for RCL to gain foothold in the GSM market effectively. Hence it avoided direct competition by going after CDMA technology. The technology fit in to RCL’s strategy and added to their differentiation. CDMA has a higher capacity to transmit data[xiii] than GSM so this helped in offering R World.

The CDMA technology has a SIM lock-in feature which allowed RCL to provide high-end handsets at affordable prices. The subscribers couldn’t change the SIM cards and were tied. The price of the handset was recovered over a period of 2-3 years, with monthly installments.

Mode of Competition (How): New game

RCL redefined the rules of the game, restructuring the business itself to match RCL’s strengths. They also redefined the market in that they expanded the user base hugely due to low pricing. Some of their game changing moves were:
Distribution: In terms of distribution, they set up Web-world outlets, which were RCL specific stores which wasn’t the market practice. Through Dhirubhai Ambani Entrepreneurship program RCL roped in students, housewives and many others to sell RCL connections. This was a first in Indian telecom space. Overall RCL had a strong mix of internal and external channels including direct sales, agents, retailers, webworlds, and webworld expresses.
R World: Another unique innovation by RCL wherein several partnerships with NSE, Indian Airlines, Microsoft, etc have resulted in a whole gamut of value added services (VAS) for the users thus helping to differentiate RCL.
Due to low ARPUs, the B and C circles and rural population was not targeted by incumbent players. RCL exploited this subscriber base that was never considered important by the competitors. As with most selective new game strategies, RCL changed the way some customer groups looked at telecom service. It redefined the rules of the game, combining low cost, high quality and innovative product differentiation.

Marketing: RCL initiated a huge advertizing campaign banking on famous celebrities such as Virendar Sehwag, a mass icon. Thus, Relcom positioned itself firmly in the minds of the masses.

Pricing: Relcom applied penetration pricing when they initially launched the mobile phones. RCL launched at a tariff of 40 paise per minute with 400 minutes of free outgoing calls for a three year subscription of Rs. 14,400 and a free handset (see exhibit 10).

Timing of competition (When): Timing

RCL, through a subsidiary, Reliance Telecom, already had GSM licenses in few C circles. But with CDMA licenses being approved and UAL[1] passed, they decided to jump full throttle. We will later see in this report that they eventually moved across the board with their strategy, offering GSM services after success in CDMA (56.71% CDMA market share as on 31/3/08[xiv]).

Competitive Reactions

Tariff war[xv]

Expectedly, RCL’s launch threatened the dominant GSM players which had high rates and wide subscriber base. RCL launched its services with a 60 second rate of 40 p, with a rental of Rs 249 per month. Tata Teleservices had a pulse rate of 3 minutes @ Rs. 1.2, with a rental of Rs. 295 per month. TATA was offering similar tariffs to RCL, the only difference being, TATA had a 3 minute pulse. Consumers saw the RCL offering as a more cost effective offering as a call duration of 1 minute would be charged @ 40 p in the RCL network whereas TATA would charge Rs 1.2 on RCL’s launch, TATA responded by modifying its pulse rate. Other GSM operators were charging a rate much higher than that of RCL. RCL also offered STD services at 40 paise per minute. This was in direct completion to the newly launched long distance services provided by GSM players. GSM players like Bharti and Hutch (now Vodafone) responded by slashing their tariffs by more than 2/3rds from Rs. 9 per minute to Rs. 2.99 per minute. (Check exhibit 9 on how tariff wars helped increase subscriber base). RCL played the role of a price leader and all other competitors followed what RCL did. In response to RCL’s R world services, many operators included internet services in their packages.

Industry Evolution and subsequent strategic moves

The Indian telecom industry changed rapidly over next few years. The mobile sector grew from about 10 million subscribers in 2002[xvi] to about 400 million as on 31st March, 2009 (check exhibit 8), representing a growth of approx 70% year on year. However, with time, the industry forces have changed the industry structure to reduce its attractiveness (check exhibit 7b on Porters 5 forces analysis on current telecom industry). The changes have also come in multiple dimensions: wireless, broadband, DTH, IPTV, WiMax, Value Added Services (VAS), etc and also geographically. Overall, the changes may be characterized as creative change. The core assets of the telecom industry in terms of technology such as GSM or CDMA may become obsolete rapidly with emergence of new technologies such as 3G. However, the activities of the industry players such as providing value added services are growth drivers of the future (check exhibit 11). Let’s analyze what strategies the players have adopted to cope with the changes.

Reliance Communications

From the very beginning, RCL pursued a diversification strategy and offer a full gamut of services to reduce obsolescence risks and to try to win the game (check exhibit 14 on RCL’s business mix). The components of diversification strategy were globalization and technologically integrated game play.

Some of its major acquisitions were: Flag Telecom which had 200 global carrier customers and service providers in 28 countries, made it possible for RCL to offer international long distance services; Yipes Holdings which is strongly positioned in Metro Ethernet based high growth enterprise service market[xvii]; WiMAX operator eWave, a major player in 4G WiMax sector; Uganda-based Anupam Globalsoft(U) Limited, marking their entry in Uganda, etc. It also established a joint venture with US-French telecom equipment supplier Alcatel-Lucent to provide network services to telecommunications operators.

The acquisitions and other diversification moves by RCL can be considered under the context of the three essential profitability tests proposed by Michael Porter.

Attractiveness test:

Clearly data segment holds big value to all telecom players. The market for VPN and Ethernet solutions business is over Rs. 160,000 crores or USD $32 billion[xviii]. Yipes acquisition gave Reliance entry to the lucrative Rs 400,000 crore ($ 100 B) global enterprise data market[xix]. The market for mobile value-added services is estimated at Rs 380 crore, and it is expected to grow to around 3,500 crore by 2010[xx]. Notably, all these businesses are high EBITDA businesses and source of most of the growth in RCL’s income statement[xxi]. Number of broadband and internet subscribers is also growing at a frenetic pace (exhibit 16).

Cost of entry test:

The acquisitions clearly portray a pattern. RCL invests in high quality companies in poor financial positions, thus getting them cheap but giving it a global footprint and access to emerging high growth technologies. At its peak, Flag Telecom had a market cap of $7 B, but RCL bought it for $207 M. Vanco once had a market cap of $750 million [xxii], so the $76.9 million price-tag reflects RCL’s astuteness. Yipes Holdings, a pioneers of Carrier Ethernet services, was acquired for around $300 million a few years after it came out of bankruptcy filing in 2002.

Better off test:

The global segment’s contribution to RCL’s revenues was nearly 25% in FY09[2][xxiii]. RCL’s move into GSM also deserves special mention. This move gave them huge economies of scope. At the end of March-09, RCL’s wireless subscribers market share went up to 18.8% from 17.9% in Dec-08 whereas Airtel lost its subscriber market share from 25% to 24.3%[xxiv]. RCL leveraged its CDMA network to rapidly expand GSM footprint with just the incremental cost in record time of 11 months from receiving spectrum in January 2008 to launching services in December 2008.

Mahanagar Telephone Nigam Limited (MTNL)

MTNL, set up in 1986 by the Indian government, currently has 8.06 million subscribers.
Growth under the government: As government owned company, MTNL got a lot of policy support, causing growth in early stages. MTNL almost had a monopoly in the fixed landline segment till the opening up of the landline segment in 1999 with the National Telecom policy. Due to protectionist policies, MTNL had the advantage to launch many services like internet services in 1999, broadband services in 2005 etc much before other private players could capture the market. “MTNL had introduced WLL[3] with Limited Mobility based on CDMA technology during 1999”[xxv]. So it had first mover advantage even in CDMA. However, it failed to capitalize on these advantages. With respect to Jay Barney’s model of analysis, MTNL’s competitive advantages were valuable, rare and were not easy to imitate. But it failed primarily because of buildup of slack. The public sector mindset of many managers hampered decision making and led to them overlooking many opportunities. It was also a victim of bureaucratic red tape, as all major decisions had to be cleared by the DOT.

Hutchison Essar - Vodafone[xxvi]

Hutchison Essar was formed as a joint venture between the Essar group and Hutchison Whampoa. It started off in Bombay circle in 1995. In 2007, Vodafone, a UK based telecom giant, acquired Hutchison essar for $11.1 billion. Vodafone now has close to 70 million subscribers and commands a wireless market share of about 18% (exhibits 1 and 8).
Acquisition strategy: Like Bharti, Hutch also followed the acquisition strategy to expand its services. It acquired Sterling cellular (Delhi), Usha Martin (Calcutta) Fascel (Gujarat), Escotel (Punjab), and Aircel (Chennai). The most significant acquisition is the purchase of 64% stake in BPL communications, which also has operations in Mumbai (Check exhibit 19).
Target High end then Masses: Hutch has traditionally targeted high end users. This is evident from their bidding patterns wherein they bid for and acquired licenses in high ARPU circles like Mumbai, Calcutta, Punjab etc. In terms of advertising, the Hutch brand was built with a very minimalistic look and feel that would appeal to high end users. However, as ARPU’s started declining over the board, and after Vodafone takeover, the focus has shifted more towards the rural market. It can be said that it’s trying to imitate the leaders’ strategy. It also entered into network sharing agreements with Bharti, and earned additional revenues by sharing their towers.

Bharti Airtel[xxvii]

Being a pioneer of the telecom sector, Bharti Airtel had many first mover advantages. It recently crossed the magical figure of 100 million subscribers[xxviii]. Firstly, Bharti entered the market in its early stages, when the government gave out licenses for the first time. This put Bharti ahead of other late entrants, on the learning curve, and helped Bharti to constantly innovate. Secondly, as the first mover, it had the advantage of the ‘network effect’. Due to the existing large base of subscribers, Bharti got the first preference when a consumer made a purchase decision. A consumer would most likely want to connect to a network that most of his friends and relatives already use, rather than go for a different operator as there are often discounted rates for same network calls. This unique advantage helped Bharti grow its subscriber base manifold.
Globalization strategy[xxix]: RCL’s Yipes acquisition was necessitated by Airtel’s investment with SingTel in the i2i cable from India to Singapore[xxx]. Apart from actively hunting for companies to acquire, Bharti has also expanded its footprint globally by acquiring licenses in countries such as Seychelles, Channel Islands, Jersey Islands and Sri Lanka.
Diversification: Just as the ARPU from basic telecom services has declined steadily through the last decade (exhibit 19) so Airtel continuously diversified into newer territories. It acquired National long distance and International Long distance licenses in January 2002 and July 2002 respectively. It partnered with Cisco to launch IPTV services in 2008. In the same year, they launched DTH services under the Bharti Airtel brand name. Recently, in 2009, Bharti launched 16 mbps broadband services in key markets in India. It also introduced many value added services (VAS) such as Electronic recharge, Hello tunes, Airtel live, Portfolio manager, Song catcher, Easy music, Blackberry handsets, M-cheque facility[xxxi].
Outsourcing: In 2005, Bharti adopted a game-changing outsourcing strategy. It made a lumpy commitment to enter into agreements worth around Rs 1000 crore with Hinduja TMT (HTMT), IBM Daksh, Emphasis, TeleTech Services and Nortel to outsource its call centre operations and most internal technology infrastructure.
Marketing and Matchbox strategy - Bharti followed an aggressive marketing strategy wherein it outspent the competition in terms of advertising.[4] Bharti accentuated focus on distribution by adopting a unique Matchbox strategy[xxxii], wherein they made it a point that Bharti recharge cards were available wherever a matchbox is available. This ensured maximum reach.
Sustaining superior performance: Bharti has successfully deterred imitation by virtue of its first mover advantage as discussed. RCL tried to undermine Bharti’s first mover advantage by substitution, attempting to change consumers’ preferences (through CDMA and diversified offerings). Bharti has countered that through the lumpy choice of outsourcing. Moreover, by outsourcing to several parties at a time, it dissipated holdup risks. It has also avoided slack by commitment to quality standards: it is now the largest Indian ISO 27001:2005 certified organization.[xxxiii] It also recently restructured the top management.[xxxiv]

Implications

It may be concluded that RCL has established the following competitive advantages: 1. Reliance brand name: The biggest advantage is the Reliance – Anil Dhirubhai Ambani Group (ADAG) backing. When RCL was launched, under the undivided Reliance Group, the group was the biggest industry house in India. Reliance - ADAG, an offshoot this group, ranks among India’s top three private sector business houses in terms of net worth[xxxv]. Thus RCL has almost unlimited access to capital under the shelter of stretchy Reliance brand name. 2. Strong execution capabilities: It recently led an unconventional and innovative GSM launch strategy that gave it nationwide success by using the concept of air time minutes as currency. RCL’s NLD network, whose span is almost twice of next largest private NLD [5] service provider, has crossed 190,000 km of ducted fiber optic cable on 31st March, 2009[xxxvi]. 3. Low cost leadership: Its pan India network and large subscriber base reduces network cost, giving it bargaining power with vendors.[xxxvii]RCL successfully gained competitive advantage through economy of scale in procuring equipments at prices about 50% lower than that of any other operator in India. This structural advantage enabled it to offer competitive tariffs and ramp up a subscriber base of 5m from virtually nothing within 10 months of initial launch.[xxxviii] RCL is also the only private service provider with a multi-terabit capacity from India to Europe at low cost since most of the build was financed through pre-sales of capacity on the global network[xxxix]. 4. Superior distribution and infrastructure reach: RCL now has network in all states in India providing coverage to over 90% of India’s population. It also has the “largest private submarine cable system in the world, directly connecting 40 countries from the East coast of the United States, to Europe, the Middle East, India, South and East Asia, through to Japan”[xl]. “Its GSM distribution has also gained traction from the strategy of enlisting franchisees, rather than exclusively through its Web World stores. Franchisees are reported to be more eager to take up GSM than CDMA, plus Bharti and Vodafone, the other two hot franchises, are supposed to be saturated in the major cities.”[xli] 5. Integrated model: The diversified offerings have given RCL a huge economy of scope. In the last few months, RCL used its towers for both CDMA and GSM to provide dual network offering on a pan India basis.
All the above resources continue to add value for RCL despite the creative changes in the Telecom industry. Each activity reinforces the other, creating a complex system of intertwined factors. It is very difficult for other firms to imitate (either through duplication or substitution) any of the above factors (let alone the combination) due to the huge cost disadvantage it gives to the followers. With RCL’s new moves such as Reliance Big TV bearing fruit [6] coupled with its GSM foray, the game can change in RCL’s favour in the near future. Bharti’s growth has slowed in broadband while RCL has gained 60% share of Indian data card internet access market[xlii]; this poses worrying signs for Bharti. Thus, even though RCL has not yet won the game in Indian telecom market, it looks set to pose a very serious threat to Bharti. Time will tell whether Dhirubhai’s dream of unlimited growth will hold true for Reliance Communications.

Exhibits

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Exhibit1: Telecom sector in the year 2007-08; Source TRAI

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Exhibit 2: Wireless market share as on March 31, 2009

Source:http://convergence.in/blog/2009/04/23/wireless-subscribers-base-at-386-mn-airtel-losing-to-reliance-broadband-growth-slowsdown/

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Exhibit 3: Sensex, RCL and Airtel share movements; Source: Yahoo Finance

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Exhibit 4: Source: Datamonitor

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Exhibit 5: Spectrum Allocation Criterion, 2002

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Exhibit 6: Subscriber growth of wireless (GSM and CDMA) services; Source: TRAI report 07-08

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Exhibit 7a: Telecom Industry before RCL’s Launch: Very Attractive

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Exhibit 7b: Telecom Industry as in 2009: Not so attractive

|No of Subscribers |

Exhibit 10: Selected RCL Tariff plans

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Exhibit 11: VAS revenue share; Source: COAI/PwC Benchmarking Report 2008

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Exhibit 12: All India ARPU of GSM mobile operators

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Exhibit 13: All India Minutes of use (MOU) of mobile services

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Exhibit 14: RCL Business Mix; Source: RCL Annual Report 07-08

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Exhibit 15: Number of licenses as on July, 2003; source: TRAI: The Indian Telecommunication Industry
Performance Indicators 2002-03

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Broadband Subscribers Internet Subscribers

Exhibit 16: Source: TRAI Annual Report

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Exhibit 17: Percentage of Rural Subscribers in GSM

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Exhibit 18: Declining Average Revenue Per User (ARPU) in GSM

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Exhibit 19: Source: Indian Cellular Industry: Is there First Mover Advantage?Thomas Joseph; R Sai Prakash; South Asian Journal of Management; Jul-Sep 2006

| REPORTING DETAILS |
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| Income Statement |
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Exhibit 20: Relative performance between RCL and Bharti; Source: EMIS

References

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[1] Unified Access Licensing
[2] The FY09 report is unaudited
[3] Wireless Local Loop
[4] . The annual marketing budget of Bharti Airtel stands at Rs 1905 crore in 2009.
[5] National Long Distance
[6] “Reliance Big TV managed to get 1 mn customers within 90 days of launch, which is a World Record.” Source:http://convergence.in/blog/2009/01/23/reliance-communications-lackluster-q3-arpus-down-8-qoq/

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[i] http://www.nextbillion.net/news/india-the-fastest-growing-telecom-market
[ii] http://www.chowk.com/articles/5039

[iii] http://www.chowk.com/articles/5039

[iv] CRISIL research telecom services annual review - 2007
[v] CRISIL research telecom services annual review - 2007
[vi] http://www.chowk.com/articles/5039

[vii] http://www.business-standard.com/india/news/tata-sons-buys-over-1-stake-in-vsnl/249729/

[viii] CRISIL research telecom services annual review - 2007
[ix] http://www.chowk.com/articles/5039

[x] http://www.itexaminer.com/pagers-are-almost-history.aspx

[xi] http://www.chowk.com/articles/5039

[xii] http://www.businessworld.in/index.php/Telecom/Towering-Problems/Page-2.html

[xiii] White paper: CDMA-An Access Method that Makes a Difference-Aug 9, 2006 (page 5)
[xiv] TRAI Annual Report 2007-08
[xv] http://www.hindu.com/biz/2003/01/13/stories/2003011300180200.htm

[xvi] http://trak.in/tags/business/2007/06/19/indian-telecommunication-story-from-10-million-to-150-million-mobile-subscribers-in-5-years
[xvii] RCL 07-08 Annual Report
[xviii] RCL FY09 Q4 Earnings Call Transcript (page 10)
[xix] http://www.relianceadagroup.com/ada/yipes.html
[xx] http://www.financialexpress.com/news/Value-added-services:-telecom%27s-ringing/76252/
[xxi] RCL FY09 Q4 Earnings Call Transcript (page 29)
[xxii] http://contentsutra.com/article/419-reliance-globalcom-acquires-struggling-uk-based-mvno-vanco-for-769-mill/
[xxiii] Calculated from RCL FY09 Q4 Report and FY08 consolidated report
[xxiv] http://convergence.in/blog/2009/04/23/wireless-subscribers-base-at-386-mn-airtel-losing-to-reliance-broadband-growth-slowsdown/
[xxv] White paper: Spectrum Auctions in India-Sidharth Sinha (Page 10)
[xxvi] http://en.wikipedia.org/wiki/Vodafone_Essarx

[xxvii] http://www.iloveindia.com/economy-of-india/top-50-companies/bharti-enterprises.html

[xxviii]http://www.airtel.in/wps/wcm/connect/About%20Bharti%20Airtel/bharti+airtel/media+centre/fy2009-2010/pg-bharti_airtel_crosses_100_million_customers_mark
[xxix] http://www.stockwatch.in/bharti-airtel-eyes-overseas-acquisitions-21262

[xxx] http://lw.pennnet.com/display_article/145439/13/ARTCL/none/none/1/Partners-open-first-phase-of-undersea-passage-to-India/
[xxxi] http://www.slideshare.net/candycoy_2001/airtel-presentation

[xxxii] http://www.slideshare.net/candycoy_2001/airtel-presentation

[xxxiii] http://buzz7.com/business/bharti-airtel-is-indias-largest-certified-organization.html
[xxxiv] http://www.hindu.com/2009/03/13/stories/2009031355031400.htm
[xxxv] http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus_reliancegroup.jsp
[xxxvi] RCL FY09 Q4 Earnings Call Transcript (page 8)
[xxxvii] ICRA Credit Perspective – Reliance Communications Ltd, 2006 (Page 2)
[xxxviii] Industry report-Indian telecom sector-IDBI Capital (Nov 20, 2003)
[xxxix] RCL FY09 Q4 Earnings Call Transcript (page 10)
[xl] RCL FY09 Q4 Quarterly Report (page 5)
[xli] IIFL India Strategy Report, July 3, 2009, Page 14
[xlii] http://convergence.in/blog/2009/01/23/reliance-communications-lackluster-q3-arpus-down-8-qoq/